USD/IDR Price News: Rupiah buyers flirt with $14,350 as Indonesia tackles coal supply crunch

• USD/IDR stays pressured around intraday low during two-day declines.
• Indonesia Senior Minister dashes emergency over domestic coal supplies.
• Pre-NFP trading caution weighs on US Treasury yields, greenback.

USD/IDR pares intraday losses around $14,350, down 0.13% on a day during early Friday in Europe.

In doing so, the Indonesia rupiah (IDR) pair drops for the second consecutive day while cheering the broad pullback of the US dollar and Treasury yields, as well as upbeat news from home.

Earlier on Friday, a Senior Minister said on CNBC Indonesia that the emergency is over on the domestic coal supply crunch. It’s worth noting that firmer prices of palm oil, Indonesia’s key export item, also favor the IDR prices of late. “The (benchmark palm oil) contract has gained 6.5% so far this week, rising for a third straight week and heading for its best week since the week ended Oct. 8,” said Reuters.

Adding to the pair’s weakness could be the recent pullback in US Treasury yields amid downbeat inflation expectations, portrayed by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, as well as softer US data.

That said, the US 10-year Treasury yields consolidate recent gains around a nine-month high while the S&P 500 Futures and EuroStoxx Future print mild gains. However, the market sentiment remains dull as the pre-data caution joins escalating covid woes and the US-China tussles, recently over trade and human rights.

Even so, recently hawkish Fedspeak and hints of faster rate hikes in the latest FOMC Minutes keep USD/IDR bears cautious ahead of the key US jobs report.

The US Nonfarm Payroll (NFP) is expected to rise from 210K to 400K while the Unemployment Rate may have eased to 4.1% from 4.2% prior. The underemployment rate, however, is likely rising from 7.8% to 8%.

Read: Nonfarm Payrolls Preview: A strengthening labor market backs a tighter monetary policy

Technical analysis

A failure to cross a two-month-old horizontal area around $14,440-55 triggered the USD/IDR pullback. However, the 200-DMA level surrounding $14,350 challenges the immediate downside.